Consider the balance sheets and selected data from the income statement of Keith Corporation that follow (attached) a. Calculate the firm's net operating profit after taxes (NOPAT) for the year ended December 31, 2015. b. Calculate the firm's operating cash flow (OCF) for the year ended December 31, 2015. c. Calculate the firm's free cash flow (FCF) for the year ended December 31, 2015. d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c).
Consider the balance sheets and selected data from the income statement of Keith Corporation that follow (attached) a. Calculate the firm's net operating profit after taxes (NOPAT) for the year ended December 31, 2015. b. Calculate the firm's operating cash flow (OCF) for the year ended December 31, 2015. c. Calculate the firm's free cash flow (FCF) for the year ended December 31, 2015. d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c).
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Consider the balance sheets and selected data from the income statement of Keith Corporation that follow (attached)
a. Calculate the firm's net operating profit after taxes (NOPAT) for the year ended December 31, 2015.
b. Calculate the firm's operating cash flow (OCF) for the year ended December 31, 2015.
c. Calculate the firm's free cash flow (FCF) for the year ended December 31, 2015.
d. Interpret, compare and contrast your cash flow estimate in parts (b) and (c).
Transcribed Image Text:Data Table
December 31
Assets
2015
2014
Cash
$1,500
$990
1,180
1,790
Marketable securities
1,850
2,030
Accounts receivable
Inventories
2,850
2,850
$8,230
$29,470
Total current assets
$6,810
$28,110
13,060
Gross fixed assets
Less: Accumulated depreciation
14,710
Net fixed assets
$14,760
$22,990
$15,050
Total assets
$21,860
Liabilities and Stockholders' Equity
Accounts payable
Notes payable
$1,450
2,210
$1,650
2,790
Accruals
210
300
$4,650
$3,960
$5,080
Total current liabilities
Long-term debt
$4,890
$9,540
$10,000
3,450
Total liabilities
$9,040
Common stock
$10,000
Retained earnings
2,820
Total stockholders' equity
Total liabilities and stockholders' equity
$13,450
$12,820
$22,990
$21,860
Income Statement Data (2015)
Depreciation expense
Earnings before interest and taxes (EBIT)
Interest expense
$1,650
2,720
371
Net profits after taxes
1,409
Tax rate
40%
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